Woolies defies retail conditions

Supermarkets drive sales

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Supermarket retailer Woolworths Limited (ASX: WOW) has reported a 2.5% rise quarterly sales to $14.4 billion, despite the challenging retail conditions.

Sales growth has been driven by its core food and liquor division, which includes supermarkets, BWS and Dan Murphy’s stores, which saw a 5.6% rise in revenues.

Home Improvement, which includes Masters and HoME Timber and Hardware, recorded a 37% rise in sales to $290 million, on the back of 4 new Masters stores and 6 HoME hardware stores acquired during the quarter. Woolworths now has 29 Masters stores opened, with another planned to open before the end of June.

Hotel sales also jumped, rising 19.7%, driven by the acquisition of 29 hotels in New South Wales, two in Queensland and one in WA in the first half of the 2013 financial year, as well as Victorian gaming regulatory changes.

Big W also saw rising sales, up 1.8% adjusted for the Easter period, although like for like sales fell 0.8%. Home entertainment declined further, showing how consumers are choosing to either buy their electronics, DVDs and music online, or through retailers such as JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings (ASX: HVN).

CEO Grant O’Brien said while the result was pleasing, there is still a lot more work to do in transforming the business. He added that the company continued to increase market share, customer numbers, basket size and items sold, compared to the prior year. Price deflation continues to be an issue, with average prices falling 2.5%, although it appears to be slowing, with the previous quarter recording 2.8% price deflation.

Pleasingly, online sales increased by 36% for the quarter, reflecting ongoing changes to customer shopping preferences.

Foolish takeaway

Yet another great quarterly result from the supermarket retailer. Despite intense competition with Coles – owned by Wesfarmers Limited (ASX: WES), IGA supermarkets and Aldi, Woolworths continues to deliver fantastic results, and investors could do much worse than having this stock in their portfolio.

With its legendary, fully franked 28 cent dividend, Telstra is the darling of Aussie investors. Chances are even if you don’t own Telstra shares directly, your superannuation fund does. But with its share price skyrocketing over the past year, is Telstra past its prime? Click here for our brand-new report: Buy, Sell, or Hold Telstra?

More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in Woolworths and JB Hi-Fi.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »